Here again my weekly “thoughts” on COT positioning:
COT Index 158, 78 and 13 weeks back to 0 (means overpriced within the time range). Dramatic change in net positioning by the commercial !!! 49K futures contracts added and 45K options contracts added. Net short % positioning to 55%! One of the most extreme positioning ever. Only Sept 2012 was a bit higher. Remember that the Gold decline started than….Striking that options positioning went down to 10% net short. These are only commercials data. Managed money increased net long % positioning to unseen highs (not shown). This means that upward potential is rather limited. Also keep in mind that these are data from last Tuesday, so changes till Friday are not included and we need to assume even more extreme positioning for next COT Report. No significant changes in DXY, meaning that it is still a buy… Interesting changes again in EuroDollar positioning. Eurodollar should be seen as a proxy for market liquidity and liquidity changes thus also directly affects asset prices. e.g. minimum in net short % by commercials coincided to recent local Gold minimum. I believe that this recent surge in Goldprice by almost 100$ is caused by BREXIT fears and “hedging” for it rather than by real fundamental medium term positioning. Regarding the meanwhile limited upward potential (some dream about the 1400 US$ Range), a rather dramatic downward correction is to be expected in the case os NO Brexit. From this positioning even sub 1000 US$ prices ARE possible. So be careful with your trades… Still staying out and neutral...
COT Index 158, 78 and 13 weeks back to 0 (means overpriced within the time range). Dramatic change in net positioning by the commercial !!! 49K futures contracts added and 45K options contracts added. Net short % positioning to 55%! One of the most extreme positioning ever. Only Sept 2012 was a bit higher. Remember that the Gold decline started than….Striking that options positioning went down to 10% net short. These are only commercials data. Managed money increased net long % positioning to unseen highs (not shown). This means that upward potential is rather limited. Also keep in mind that these are data from last Tuesday, so changes till Friday are not included and we need to assume even more extreme positioning for next COT Report. No significant changes in DXY, meaning that it is still a buy… Interesting changes again in EuroDollar positioning. Eurodollar should be seen as a proxy for market liquidity and liquidity changes thus also directly affects asset prices. e.g. minimum in net short % by commercials coincided to recent local Gold minimum. I believe that this recent surge in Goldprice by almost 100$ is caused by BREXIT fears and “hedging” for it rather than by real fundamental medium term positioning. Regarding the meanwhile limited upward potential (some dream about the 1400 US$ Range), a rather dramatic downward correction is to be expected in the case os NO Brexit. From this positioning even sub 1000 US$ prices ARE possible. So be careful with your trades… Still staying out and neutral...
